Refer Figures 12-1, 12-2 and 12-3 and Prepare a fully automated & linked Excel sheet linking all three sheets for compute intrinsic value of shares. (12-1) Broussard Skateboard's sales are expected to increase by 15% from $8 million in2013 to$9.2 million in 2014. Its assets totaled $5 million at the end of 2013.Broussard is already at fullcapacity, so its assets must grow at the same rate as projected sales. At the end of 2013, currentliabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notespayable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 6%, and theforecasted payout ratio is 40%. Use the AFN equation to forecast Broussard's additional fundsneeded for the coming year.(12-2) Refer to Problem 12-1. What would be the additional funds needed if the company's year-end 2013 assets had been $7 million? Assume that all other numbers, including sales, are thesame as in Problem 12-1 and that the company is operating at full capacity. Why is this AFNdifferent from the one you found in Problem 12-1? Is the company's "capital intensity "ratio thesame or different?(12-3) Refer to Problem 12-1. Return to the assumption that the company had $5 million inassets at the end of 2013, but now assume that the company pays no dividends. Under theseassumptions, what would be the additional funds needed for the coming year? Why is this AFNdifferent from the one you found in Problem 12-1?

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(12-1) Broussard Skateboard's sales are expected to increase by 15% from $8 million in2013 to $9.2 million in 2014. Its assets totaled $5 million at the end of 2013.Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2013, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 6%, and the forecasted payout ratio is 40%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year.

(12-1) Broussard Skateboard's sales are expected to increase by 15% from $8 million in2013 to $9.2 million in 2014. Its assets totaled $5 million at the end of 2013.Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2013, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 6%, and the forecasted payout ratio is 40%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter9: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 1P: Broussard Skateboard’s sales are expected to increase by 15% from $8 million in 2018 to $9.2 million...

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Broussard Skateboard's sales are expected to increase by 15% from $8 million in 2013 to $9.2 million in 2014. Its assets totaled $5 million at the end of 2013. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2013, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 6%, and the forecasted payout ratio is 40%. Forecast Broussard's additional funds needed for the coming year.
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